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With crude oil trading down to $126 a barrel, though some are still touting the price is moving to $200, or even $300 a barrel, it actually looks more like it is heading to at least $100 barrel. With growing sentiment in Congress, even among mainstream Democrats, to accept President Bush's proposal to do more drilling, the market has taken this as a signal that the government is serious about taking action to bring down prices at the pump. If the Democratic leadership would get on board, the current drop in crude prices would be nothing compared to what could happen.

Coupled with projected slower growth in emerging markets, most notably China, where we could see GDP growth slow by more than 2%, why should the price keep moving higher?

it's important to note that the decline we have witnessed over the last few weeks should result in a drop of over 50 cents a gallon at the pump. Coupled with people driving less, thus easing the demand, the increased supply, or the potential of increased supply on the market should help keep prices moving down.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/23/08.

Pfizer (NYSE: PFE) is out with earnings and they are solid. The company reported that net income more than doubled from Q2 '07, to $2.77 billion. Adjusted net income came in at 55 cents, a penny above estimates. MarketWatch reports, "Pfizer said it reaffirmed its full-Year 2008 revenue and adjusted net income targets. It's on track to achieve its total cost-reduction target."

The stock may very well trade up on this news. Keep in mind that while shares haven't performed well, with a 7% dividend yield, the stock may be an interesting play for investors looking for both income and a potential turnaround story.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/23/08.

Yahoo, Inc. (NASDAQ: YHOO) is out with numbers and it appears that while there is a bit of growth, it's nothing to write home about. According to the Business Wire report: " Revenues were $1,798 million for the second quarter of 2008, a 6 percent increase compared to $1,698 million for the same period of 2007. "

Keep in mind that with the big shareholder meeting set for August 1st, don't you think the company would have done all they could to deliver a super earnings report? If this is the best that they can do, 6% revenue growth, then something is very wrong with management, and Carl Icahn is going to have a much easier job of trying to replace CEO Jerry Yang. With shares trading at about $20, they are going to have to do some fancy talking to show why rejecting a $31 to $33 per share offer from Microsoft Corporation (NASDAQ: MSFT) was actually good for shareholders.

The company keeps talking a good game and about future growth, but it comes down to just one principle for investors: Show us the money.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/22/08.

So the sky isn't falling.

Corporate earnings aren't that bad and are surprising analysts. Oil prices are falling just as quickly as they rose. If you are a contrarian investor, you must have a big grin on your face.

Common wisdom had it that markets were going to keep dropping, that the price of crude would hit $200 a barrel, and that bank after bank would go bankrupt. But what's happened? The opposite. Bank earnings aren't as bad a feared, crude has fallen to under $130 and suddenly investors are a bit more optimistic.

Even when we get bad news, like earnings from Apple (NASDAQ: AAPL), Texas Instruments (NYSE: TXN) and others, the market is able to hold up. Industries that just a week ago were being left for dead suddenly came roaring back to life. For investors who like to dabble in out of favor stocks, this market is a dream come true. Battered sectors such as financials, airlines, and even autos have surged over the last week. Who would have dreamed that airline stocks would actually stage a rally? What's interesting is that even with their recent move these sectors are all still trading significantly off their highs, meaning that potentially we have much more room to run.

Wachovia (NYSE: WB) is out with numbers that were much worse than the Street had estimated. According to MarketWatch Wachovia "lost $8.86 billion, or $4.20 a share, in the second quarter, compared to a profit of $2.34 billion, or $1.20 a share, a year ago. On an adjusted basis, it lost $1.27 a share; analysts polled by FactSet Research had expected a loss of 71 cents a share."

Yikes. A loss of $8.9 billion -- how is that even possible? The company also slashed its dividend to just 5 cents a share and is closing down its wholesale mortgage operations.

I guess the real question is barring a takeover, how long will it be till the whole bank gets shut down? Just think the loss is equal to a third of its entire market cap.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/22/08.

Republican presidential candidate Sen. John McCain, is launching a new TV ad that puts the blame of $4.00 gasoline at the feet of Barack Obama. As reported by Breitbart.com the ad asks, "Gas prices-$4, $5, no end in sight, because some in Washington are still saying no to drilling in America. No to independence from foreign oil. Who can you thank for rising prices at the pump?" The answer is Obama.

The fact is that while I doubt only Obama is to blame, the nominee, along with the power brokers in the Democratic party, have presented no solution to help ease pain at the pump. If the jump in crude oil is based on a a supply shortage, then the Republican solution of more drilling, both offshore and in Alaska makes sense.

Obama has rejected this, but has put forward no tangible solution. On the one hand, he agrees that the U.S. needs to be energy independent, but on the other hand, offers no serious way of getting to independence. Wind power and other non-nuclear alternatives don't have the scale to power an entire nation. Just an aside, but isn't it odd that when talking about 'alternative energy,' nuclear is never mentioned, though in other parts of the world like Europe it produces a sizable amount of energy.

As for environmental concerns, oil is now brought out of the ground with cutting edge technology, so worries of huge oil spills isn't all that realistic.

Consumers should stop being held hostage by election year politics, and for the good of the nation, Obama should cross party lines and agree to increased drilling.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/21/08.

Shares of battered Israeli WiMax company Ceragon Networks (NASDAQ: CRNT) are surging today on the heels of a strong earnings report. As reported by Briefing.com: "earnings of $0.13 per share, in-line with the First Call consensus of $0.13; revenues rose 48.0% year/year to $55.2 mln vs the $49.5 mln consensus."

Ira Palti, President and CEO of Ceragon, spoke about strong rising global demand for the company's products. Demand was also strong in the Asia-Pacific region. Shares in Ceragon, along with fellow Israeli WiMax company Alvarion (NASDAQ: ALVR), have been hit very hard during this bear market, on concerns that WiMax is more hype than a business. Today's earnings from Ceragon reinforce the fact that these companies continue to grow very rapidly and continue to sign deals.

Long term technology investors should keep an eye on this space.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has a position in both CRNT and ALVR. He has no positions in any other stock mentioned, as of 7/21/08.

With shares in Lehman Brothers (NYSE: LEH) losing another 14% of their value Monday, and the stock trading under $13, rumors are swirling as to what the bank is planning to do. While there has been speculation that the bank may be taken private, an option that I think is very interesting, others have said that another bank is going to swoop in and take over the company. At the discount levels the stock is trading, that may make sense. The only problem is who the buyer will be.

MarketWatch has an interesting article about this issue and the claim is that there really is no one out there to make a bid for the struggling investment bank. The article quotes Jeff Harte, a securities industry analyst at Sandler O'Neill & Partners, " I'm hard pressed to give you many viable buyers of Lehman. Most large banks are focused on their own capital issues. Even if a bidder did come forward, it would have to win over a lot of Lehman employees -- who control around 30% of the stock -- or risk losing them once the deal was complete."

The most obvious suitor would be JPMorgan (NYSE: JPM), but it has its hands full with Bear Stearns. Other banks like Citigroup (NYSE: C) or Wachovia (NYSE: WB) are fighting for survival. That leaves us with European banks, many of whom are also trying to stay afloat. One bank that has the money needed to finance a deal could be Deutsche Bank (NYSE: DB). It could be interested in a deal as it would gain a foothold into the fixed-income desk at Lehman. The only problem is that the bank is focused on growing its retail banking franchise, not investment banking.

Which leaves us with the first option as the best one. Go private. Clean up the balance sheet, get profitable, wait a few years for the financial storm to pass, and go public once again.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/15/08.

On the heels of the move by General Electric (NYSE: GE) Thursday to spin-off its consumer and industrial division, today we have news that Citigroup (NYSE: C) is selling its German retail banking business for $7.7 billion.

According to MarketWatch: "Citigroup said Friday that it's going to sell its German retail banking business to France's Credit Mutuel for 4.9 billion euros ($7.7 billion) in a deal that will strengthen its balance sheet and help it focus on faster-growing businesses."

This is a smart move for the company in order to clean up its balance sheet, but it's just a small step. If the company truly wanted to provide shareholder value, it could spin off the credit cards division, separate domestic and global consumer banking, spin off the capital markets division and so on. I admit that I haven't done all the work on this but my hunch is that if Citi would break up the company the combined parts would be valued significantly higher than where it is now trading.

While selling the division helps the balance sheet, unfortunately the impact for shareholders is muted. I would much rather see it follow the path of GE and give shareholders a share of this business and other businesses.

At least this sale is a start.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/11/08.

As most of us struggle with surging gas prices, food costs and the possibility of losing our jobs, it's good to know that one little niche of people are oblivious to the current economic environment, and continue on with business as usual.

Sales of Fiat's Maserati brand are up 16% this year, as the rich continue to buy the $115,000 car. Add on that the Maserati gets a whopping 13 miles per gallon in the city and 19 on the highway.

Maserati's are being sought after by buyers wanting something better than your typical Mercedes-Benz, yet more affordable than Italian competitors Ferrari and Lamborghini. Nice to know that even these buyers are impacted by sticker shock!

According to an article in Bloomberg, Wes Brown who is an automotive analyst commented: "If you've got money, you want people to know you've got money, and people want to find something that not everybody has,'' Brown said. "They are saying, `I don't want a BMW or Mercedes, which you can see on every corner.'"

We all know that problem! Who can afford to buy a Maserati? The company says that the typical buyer is a 54-year-old male with household income of $750,000.

For those of you who decided to leave your car at home and take the bus in order to save a couple of bucks, you'll be glad to know that by freeing up the road, that new Maserati owner will have less traffic to deal with and be able to take the car up to its top speed of 177 miles her hour.

Who cares if gas is over $4 a gallon?

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/10/08.

Read the financial media and all you will hear about the best way to invest for your retirement is to buy ETFs and hold them. Well for the last nine months, investors have watched their savings plummet by more than 20% following that bit of advice. Even though we are still in the midst of the ETF growth explosion, it may be that with all the market volatility, active management of funds is the way to go.

According to a report in Bloomberg: " Hedge funds declined by an average 0.7 percent in June, bringing the year-to-date loss to 0.75 percent, data compiled by Hedge Fund Research Inc. shows. It's the worst start to a year since the Chicago-based firm began tracking returns in 1990."

Equity hedge funds lost about 3.3% during the first half of the year. That thoroughly crushes the S&P 500 which dropped 19% from the October peak. This actually mean that the hedge funds are doing what they are supposed to do and be a hedge against falling markets.

It will be interesting to see returns for the mutual fund industry. If actively managed mutual funds were on average able to seriously outperform the broader indices, then I think investors will start taking a real look at moving away from ETF investing and back into more traditional actively managed accounts.

How many buy and hold investors wish that they would have only lost 3.3% so far this year?

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/10/08.

In a move that many investors have wanted, General Electric (NYSE: GE) just came out and said that it is mulling over the potential spin-off of its consumer and industrial division.

According to MarketWatch, "The conglomerate said shareholders will receive stakes in the new entity covering ts appliances, lighting and industrial units."

This is great news for investors and may be a precursor for other large conglomerates that have seen their stock prices stagnate for more than six years, to start spinning off divisions in order to unlock value for shareholders.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/10/08.

You know it must be serious if the French fall into line. French oil giant Total (NYSE:TOT) became the last large Western oil firm to decide to forgo a deal with Iran.

According to a Marketwatch article: " Christophe de Margerie told the Financial Times that it won't invest in a project to develop natural-gas fields in Iran, leaving Iran without the technical know-how to significantly raise its gas exports until late next decade."

This obviously comes as good news as the US urges world leaders in both Europe and China to enforce tough sanctions against the Iranians. The feeling is that if they don't, an Israeli strike on the Iranian nuclear program is inevitable, and that could cause a full-fledged war in the Middle East.

While the other global oil titans were quick in announcing that they will refrain from doing business with Iran, Total basically only did it out of political pressure. The CEO basically reasoned that if they went ahead with the deal, people would say that Total has no principle whatsoever and that they would do anything to make a buck.

I guess as long as the ends justify the means we should applaud the Total position.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/10/08.

Leaders of the G-8 (group of 8 wealthy nations) basically did nothing in their talks to cut global greenhouse emissions. They agreed to cut emissions in half by the year 2050. How many of them will even be alive by then? I've heard of five year economic plans but 42 year plans? Something tells me it just won't work. The U.S. also was victorious in not setting any actual numerical targets.

According to a MarketWatch report: "The U.S. and several other developed countries have said they will not enter an agreement to reduce future greenhouse gas emissions which does not include binding commitments by growing industrial powers such as China and India to cut carbon."

And rightly so. Why should the U.S. bear the brunt of the economic costs of this initiative and growing economies, which are much bigger polluters, get off without having to accept any responsibility? It seems like a case of just trying to redistribute wealth from the west to emerging economies.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/8/08.

For those of us who spend countless hours sitting in front of a computer screen, getting fat eating cheese danishes and washing them down with cup after cup of coffee, there is hope. A new trend is taking shape across the U.S.: company wellness incentives.

According to a CNN Money report: "Employee programs that promote healthy lifestyles with monetary carrots and sticks are becoming increasingly popular. In fact, 46 percent of employers offer incentive-based wellness plans, according to a recent study by Watson Wyatt and the National Business Group on Health, and that proportion is expected to grow to 70 percent by 2009."

Employers have figured out that giving financial incentives to keep their workers healthier actually saves them tons of money as employees call in sick much less. This is a classic win/ win situation; employers save money and employees get healthy.

Of course, there are those critics who warn that this could constitute a hostile work environment and is illegal. After all, no one can force an employee to lose weight or lead a healthier lifestyle. To those critics I say, lighten up! (couldn't resist).

For investors, companies like Healthways (NASDAQ: HWAY) are in this space. Aside from working with individuals, Healthways is also working with employers to create tailored-made programs for staff to help make them healthier.

With obesity a growing problem, it seems that employer wellness incentives are going to be more common place.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/7/08.